Beef + Lamb NZ chair Kate Acland is warning that a recent vote to not raise director’s fees will only increase the difficulty of recruiting future directors unable to afford or justify the time off farm that the role demands.
The BLNZ annual meeting last month saw the remit to increase directors’ fees from $38,000 a year to $45,000 a year and chair fee from $76,220 to $90,000 getting the thumbs-down from two-thirds of the 12% of farmers who voted.
In comparison, DairyNZ directors averaged $47,765 for the 2022-23 financial year. Chair Jim van der Poel received $95,740.
BLNZ’s levy income for the September 2022 financial year was $30.4 million, compared to DairyNZ’s $67m.
DairyNZ’s total directors’ fee payments amounted to $582,000, compared to the $402,000 for BLNZ.
Another key industry comparison group is Federated Farmers.
Farmers Weekly understands Feds director are paid $45,000 plus a recent 6% increase, while the chair is paid $90,000 plus the 6% increase.
Acland said the decision to not pass the remit did not solve the gap between BLNZ and other primary sector industry bodies, and will still need to be addressed in future.
She said the move to increase directors’ fees was the result of an independent remuneration committee review, headed up by respected farmer and director Murray Donald.
“It was an independent recommendation. Possibly if the board had done the analysis ourselves, we would not have been so bold to suggest an increase of such magnitude.”
While it was a significant increase, she said it would only have brought BLNZ into line with other industry groups, and came after only one earlier, small, fee increase.
“When you look at the commitment and workload of the role off the farm, it is a lot.
“One director kept a log of their hours, and it is 500-600 a year. I personally have spent 90 days off the farm. You only need to miss one or two key decision-making points on farm and it will cost you.”
She cited her own example, where she was fortunate enough to have her husband at home to make the call to offload lambs over the dry period and gain an additional 40 cents a kilogram.
“If we had been relying on me, and I missed that, then it would have cost us more than my director’s fee.
“We really want to encourage the best director candidates and finances should not be a barrier to that.”
Survey work by the Institute for Directors and EY this year drew on feedback from 3950 directors across almost 1700 organisations to provide insights to what directors are earning in New Zealand.
The survey found both not-for-profit organisations and commercial company directors have averaged a 3.9% increase in fees, with the primary sector averaging 7% increases.
The average not-for-profit directors’ fee is $34,148 a year, with the average chair fee $49,558.
The survey also found 40% of directors have taken a pay cut in the past four years, despite significantly more hours worked.
Last year 26% of respondents reported an increase in unpaid roles, across both not-for- profits and commercial entities.
The need for farmer engagement with BLNZ has never been greater, with a low 12% turnout voting this year, and ongoing difficulties attracting a broad range of quality candidates for board positions.
Acland cited the DairyNZ director elections that attracted 13 candidates for two seats, compared to BLNZ attracting only three candidates for two seats, with only two of them being farmers.
“There is a perception there the Feds do it for free. They do not, and nor should they. As farmers we really need to value the job done, regardless of whether it is Feds, dairy, or beef and lamb,” she said.
“I acknowledge how tough it is on farm at present and realise it is not an easy decision to have to make.”
A spokesperson for the Institute for Directors said the not-for-profit sector can be complex and challenging, with many organisations operating in size and scale on par with large commercial organisations, yet facing more scrutiny from society relating to overhead costs.
He said remuneration for board members needs to be set at a level acknowledging responsibilities and risks, and to attract, motivate and retain members with the ability and character necessary to conduct the critical and demanding functions of being a director.
